Application Process
The application for a reverse mortgage usually takes about 45 days from beginning to end and the steps can vary.
1. Counseling
A lender cannot begin processing a reverse mortgage application until the homeowner has completed counseling and submitted a signed HECM Counseling Certificate. Counseling is available by phone from national agencies or face-face and by phone with local agencies. The cost for counseling is $125 that is paid by the borrower prior to formal loan application. Some reverse mortgage counselor service providers:
| Counselor Service Providers | Phone |
|---|---|
| National Foundation for Credit Counseling (NFCC) | 1-866-698-6322 |
| Consumer Credit Counseling Service of Atlanta (CCCS) | 1-800-251-2227 |
| National Council on Aging (NCOA) | 1-800-510-0301 |
2. Application
The application and disclosures of the reverse mortgage application will contain a listing of fees, interest rates, and loan proceeds.
3. Appraisal
The appraisal determines the market value of the property. A reverse mortgage appraisal has higher standards than a normal appraisal. It is conducted by an FHA-approved appraiser according to guidelines that require more documentation than a typical conventional appraisal.
4. Underwriting
Verification of credit or income is not required to qualify. The lender will conduct a title search and address with you any issues such as trusts, unpaid liens on the title, bankruptcies, etc. Once the lender has completed underwriting and the application is approved, the application status will change to “clear to close” status and a closing date will be scheduled.
5. Closing
On the closing date, a notary or attorney meets with the applicant to sign the final closing documents. After signing, the homeowner has a three day “right of rescission” period when they can cancel the application. After this waiting period, the title company will send a check to the homeowner.
